Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Twitter CEO Dick Costolo today. Video of the interview is available on CNBC.com.

All references must be sourced to CNBC.

MANDY DRURY: ALL DAY, WE'VE BEEN BRINGING YOU HEADLINES FROM SOME OF THE BIGGEST PLAYS IN TECH. TWITTER, OF COURSE, ONE OF THOSE BIG NAMES, BUT SHARES HAVE LOST NEARLY HALF OF THEIR VALUE SO FAR THIS YEAR. YES HALF.

SO, LET'S GO TO THE CODE CONFERENCE NOW WHERE JULIA BOORSTIN IS LIVE WITH AN EXCLUSIVE INTERVIEW WITH THE CEO OF SAID COMPANY DICK COSTOLO. JULIA

JULIA BOORSTIN: MANDY THANKS SO MUCH AND THANKS SO MUCH FOR JOINING US DICK COSTOLO HERE TODAY. NOW, DICK, I HAVE TO START OFF TALKING –

DICK COSTOLO: THANKS FOR HAVING ME.

BOORSTIN: TALKING TO YOU ABOUT MARY MEEKERS BIG PRESENTATION THIS MORNING ON BIG INTERNET TRENDS. SHE POINTED OUT THAT FACEBOOK'S AVERAGE REVENUE PER USER IS TWICE THAT OF TWITTERS. HOW CAN YOU FIX THAT?

COSTOLO: SHE ALSO POINTED OUT OURS IS ACCELERATING QUITE RAPIDLY. I WAS DELIGHTED WITH THE GROWTH SHE SHOWED IN OUR RPU THERE.

BOORSTIN: BUT WHAT ABOUT CATCHING UP? WHEN WILL YOU CATCH UP TO FACEBOOK?

COSTOLO: WE DON'T HAVE A SPECIFIC TIMELINE FOR WHEN OUR RPU HAS TO CROSS SOMEBODY ELSES RPU. IT'S GROWING QUITE WELL. IT'S SPECIFICALLY UP BECAUSE ENGAGEMENT ON THE PLATFORM ENGAGEMENT PER TWEET IS UP SO MUCH OVER THE COURSE OF THE LAST YEAR, SO THAT'S ALL GREAT FOR US.

BOORSTIN: NOW MANDY JUST MENTIONED YOUR STOCK IS DOWN NEARLY 50% THIS YEAR. NOW YOUR STOCK IS UP TODAY ON AN ANALYST UPGRADE, BUT FOR THE YEAR, THE NUMBER IS PRETTY DISAPPOINTING IN TERMS OF STOCK PERFORMANCE. HOW WILL YOU TURN THAT AROUND?

COSTOLO: I CAN'T FOCUS ON OR SPEND MY TIME PAYING SPECIFIC ATTNENTION TO THE SHORT-TERM FLUCTUATIONS IN THE STOCK MARKET. I TRY TO FOCUS ON THE LONG-TERM VIEW OF BUILDING A REALLY DURABLE BUSINESS A LASTING BUSINESS AND THAT INCLUDES MAKING SURE WE'RE INVESTING INTO GROWTH AS BALANCED AGAINST OPERATING EFFICIENCY AND OPERATING LEVERAGE IN SERVICE TO INCREASING MARGINS OVER TIME. I THINK IF WE DO THAT IN THE LONG-TERM, THE VALUE OF THE COMPANY WILL BE REFLECTED IN THE FINANCIAL RESULTS WILL BE DELIVERED.

BOORSTIN: A NEW E-MARKETER REPORT SAYS TWITTER'S GROWTH COULD TAP OUT BY 2018 WITH ABOUT 400 MILLION USERS. ARE THEY WRONG?

COSTOLO: I DON'T SPEND A LOT OF TIME COMMENTING ON OR THINKING ABOUT THIRD PARTY REPORTS. WE SEE THE DATA FROM OUR OWN SERVICE. AND THE GROWTH THAT WE SEE FROM OUR OWN SERVICE. AS I MENTIONED ON OUR EARNINGS CALL IN Q1, WE'VE SEEN RE-ACCELERATION IN OUR BIGGEST MARKET THE U.S. AND GROWTH ACROSS THE REST OF THE GLOBE, SO I'M HAPPY WITH THE WORK THE TEAM IS DOING THERE IN SERVICE TO GROWTH AND I THINK WE LIKE OUR PLAN THERE.

BOORSTIN: IT SEEMS LIKE YOU'RE INCREASINGLY COMING UP AGAINST FACEBOOK. JUST YESTERDAY, YOU ANNOUNCEDED A BIG ADVERTISEING DEAL WITH OMINICOMM WORTH ABOUT $230 MILLION, BUT JUST LAST WEEK, FACEBOOK ANNOUNCED A SIMILAR DEAL WITH ANOTHER AD GIANT PUBLICIS. ARE YOU IN A LAND GRAB HERE FOR THESE KIND OF AD EXCHANGE DOLLARS AND HOW CAN YOU WIN?

COSTOLO: WELL YEAH THE OMNICOMM DEAL WHICH WE ARE SUPER EXCITED ABOUT WAS ACTUALLY OUR THIRD. SO WE'VE HAD A NUMBER OF THEM OVER TIME THE OTHERS BEING WPP AND NSMG. THE INTERESTING THING ABOUT THE OMINICOMM DEAL FOR US IS IT WAS THE FIRST ONE THAT ALSO INCLUDED A SIGNIFICANT COMMITMENT TO OUR MOBILE AD EXCHANGE, OUR GLOBAL OVER ONE BILLION USERS IN APP NATIVE AD MOBILE AD EXCHANGE. SO, I THINK THAT'S SOMETHING WE'RE REALLY EXCITED ABOUT. I'VE TALKED ABOUT THAT A GREAT DEAL AND BRINGING THE MOBILE AD EXCHANGE AND OWNED AND OPERATED TWITTER INVENTORY IN THOSE OVER A QUARTER OF A BILLION PEOPLE TOGETHER AND DELIVERING THOSE TO ADVERTISERS IS SOMETHING THAT WE THINK IS SUPER IMPORTANT.

BOORSTIN: YOU ARE INCREASINGLY COMING UP AGAINST FACEBOOK THOUGH. FACEBOOK WANTS TO BE PART OF MORE OF THE PUBLIC CONVERSATION AS TWITTER IS AND YOU ARE BOTH FIGHTING TO BE THE SECOND SCREEN FOR TELEVISION. HOW ARE YOU GOING TO COMPETE AND WIN AGAINST FACEBOOK?

COSTOLO: WHEN WE DELIVERED OUR TV AND TWITTER STRATEGY, IT WAS BASED ON THE HYPOTHESIS THAT THE TWO WERE VERY COMPLEMENTARY TO EACH OTHER AND SINCE WE LAUNCHED THAT STRATEGY AND WORKED WITH SO MANY OF THE BROADCAST NETWORKS AND CONTENT PARTNERS LIKE THE NBA AND NFL, THERE HAS BEEN STUDY AFTER STUDY THAT HAS REENFORCED THE COMPLEMENTARY NATURE OF TWITTER AND TV. A RECENT NIELSEN STUDY SHOWED THERE ARE THREE THINGS THAT DRIVE TV RATE RATINGS FOR A SHOW. ONE INVESTMENT IN ADVERTISING DOLLARS FOR THAT PROGRAM TWO, LAST YEAR'S RATINGS FOR THE SHOW AND THREE, TWITTER AND THAT'S IT.

BOORSTIN: THERE'S BEEN A LOT OF SPECULATION THAT TWITTER IS WORKING ON AND SHOULD LAUNCH A NEW WAY FOR PEOPLE TO ACCESS TWITTER WITHOUT HAVING TO LOG IN AND SIGN UP, TO BE MORE LIKE YOUTUBE THAN LIKE FACEBOOK. WHAT DO YOU HAVE IN THE WORKS?

COSTOLO: WELL WE ALREADY HAVE A SEMBLANCE OF A LOGGED OUT EXPERIENCE IN THAT YOU CAN COME TWITTER AND VIEW PEOPLE'S PROFILES AND HOP AROUND BETWEEN PROFILES WITHOUT LOGGING IN AND THAT'S ACTUALLY A USE CASE THAT'S IN EFFECT FOR A GREAT DEAL OF USERS. AS YOU THINK ABOUT THE EXPANDED AUDIENCE OF TWITTER BEYOND THE LOGGED IN EXPERIENCE, THERE'S ABSOLUTELY AN OPPORTUNITY FOR US TO MORE BROADLY GROW THAT LOGGED OUT EXPERIENCE AND THE SYNDICATION AUDIENCE, THAT GREAT AUDIENCE ACROSS THE WEB AND MOBILE LANDSCAPE THAT VIEW TWEETS. I MENTIONED ON OUR EARNINGS CALL LAST QUARTER, JUST IN THE 48 HOURS AFTER THE OSCARS, OVER 3.3 BILLION VIEWS OFTWEETS ABOUT THE OSCARS NOT EVEN ON TWITTER. AS YOU THINK ABOUT THAT MORE BROAD AUDIENCE AND THE KINDS OF SERVICES WE CAN DELIVER TO THEM, THAT'S A BIG OPPORTUNITY.

BOORSTIN: I HAVE TO ASK YOU REALLY QUICKLY ABOUT MUSIC. YOUR REPORTED ATTEMPTS TO BUY SOUND CLOUD FELL THROUGH.YOU SHUT DOWN YOUR MUSIC APP. WHAT ARE YOU GOING TO DO ABOUT MUSIC?

COSTOLO: THE BEAUTY OF TWITTER IS THAT IT'S A GREAT PLACE TO EXPERIENCE THE MUSIC OF THE MOMENT. THE MUSIC THAT PEOPLE ARE LISTENING TO AND TALKING ABOUT RIGHT NOW. AND SO WE RECENTLY ANNOUNCED A DEAL WITH BILLBOARD IN WHICH IN ADDITION TO THEIR WEEKLY CHARTS, THEY WILL DELIVER A TWITTER CHART OF THIS IS THE MUSIC PEOPLE ARE LISTENING TO AND TALKING ABOUT RIGHT NOW. THAT CREATES THIS GREAT VIRTUOUS CIRCLE WITH THE INDUSTRY SO THAT THE ARTISTS THEMSELVES CAN ENGAGE IN CONVERSATION WITH THEIR FANS ON TWITTER IN SERVICE TO INCREASING THE NUMBER OF PLAYS THEY GET AND RADIO STATIONS THAT REFLECT THE CHARTS.

BOORSTIN: NO ACQUISITION NEWS YOU WANT TO GIVE US?

COSTOLO: I AM NOT GOING TO COMMENT ON ANY RUMORS OR SPECULATION.

BOORSTIN: OK WELL UNFORTUNATELY, WE'RE OUT OF TIME, BUT THANKS SO MUCH FOR JOINING US WE REALLY APPRECIATE IT.

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